WHY IS EVERYONE STILL BULLISH...?
AND IS IT A CONTRARIAN SIGN THAT SO MANY NEWLETTERS (SEE LINK) ARE STILL IN THE HAPPY CAMP?
MY HUNCH IS THAT IT COMES FROM THE NOTION THAT THE WEAKER DOLLAR IS "GOOD FOR" THE US ECONOMY.
IF THE US ECONOMY WERE A "NORMAL" ECONOMY THAT WOULD BE TRUE AND THE LAWS OF ECONOMIC WOULD KICK IN AND EVERYTHING WOULD BE FINE...
BUT THE US ECONOMY IS NOT NORMAL...
THE US ECONOMY IS BASED ALMOST SOLELY ON ASSET BUBBLES...LIKE THE HOUSE BUBBLE THAT IS JUST NOW BURST.
THE US ECONOMY DOES NOT RELY ON THE "PRODUCTION OF GOODS" ANYMORE...AND THAT IS A NEW PARADIGM FOR ANY ECONOMY! A YET TO BE PROVEN NEW PARADIGM THAT MAY IN TRUTH BE A FALLACY.
THE STRONG DOLLAR WAS SUPPOSED TO LET US "GET AWAY WITH" THAT LITTLE ECONOMIC HERESY! ALAS PERHAPS NO MORE!
THE US ECONOMY IS BASED ON THE US DOLLAR BEING "AS GOOD AS GOLD"....BUT THIS IS NOT CARVED IN STONE.
IN 1971 WHEN THE US WENT OFF GOLD AND SCRAPED BRETTON WOODS FOR GOOD THERE WAS HELL TO PAY... IT WAS CALLED THE 70'S!
MY HUNCH IS THAT THOSE WHO ARE ASSUMING THAT THE WEAK DOLLAR IS A NEUTRAL OR "GOOD FOR" THE US ECONOMY ARE SIMPLY MISSING A VERY IMPORTANT POINT.
AMAZINGLY THE ERROR WILL BE QUICKLY DISCOVERED JUST BELOW THE SURFACE OF THE CURRENT WHITE NOISE IN THE MARKETS...
